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Trump Takes Over DC & Tariffs on Drugs · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
0:08
Speaker 2: I'm announcing a historic action to rescue our nation's capital
0:13
Speaker 2: from crime, bloodshed, bedlam, and squalor and worse. This is
0:20
Speaker 2: Liberation Day in DC, and we're going to take our
0:23
Speaker 2: capital back. We're taking it back.
0:26
Speaker 3: Even as official Washington DC Police data shows violent crime
0:30
Speaker 3: reached a thirty year low last year and is down
0:34
Speaker 3: twenty six percent this year, President Trump declared a public
0:38
Speaker 3: safety emergency today and invoked a never before used power
0:43
Speaker 3: in DC's Home Rule Act to take over its police department.
0:47
Speaker 2: They love to spit in the face of the police.
0:50
Speaker 2: As the police are standing up there in uniform. They're
0:54
Speaker 2: standing and they're screaming at him an inch away from
0:57
Speaker 2: their face, and then they start spitting in their face.
1:01
Speaker 2: And I said, you tell them you spit and we hit,
1:06
Speaker 2: and they can hit real hard.
1:08
Speaker 3: Trump is also sending eight hundred National Guard troops onto
1:12
Speaker 3: the streets of the nation's capital. My guest is George
1:15
Speaker 3: Derrick Musgrove, a professor of history at the University of Maryland,
1:20
Speaker 3: Baltimore County. Does the president have the power to do this?
1:25
Speaker 4: The President actually has a tremendous amount of power under
1:27
Speaker 4: the Home Rule Act, and he's going to operate within
1:30
Speaker 4: that realm. So he's going to send out National Guard
1:33
Speaker 4: troops onto the streets of DC, as well as the
1:36
Speaker 4: smattering of federal agents from other agencies. That's all within
1:42
Speaker 4: his legal purview under the Home Rule Act in nineteen
1:45
Speaker 4: seventy three, which gives the President control of the DC
1:48
Speaker 4: National Guard and in emergency situation allows him to take
1:53
Speaker 4: over the Metropolitan Police Department for up to thirty days.
1:57
Speaker 3: Tell us a little bit more about the Home Rule.
2:00
Speaker 4: So the Home Rule Act, which was fass in nineteen
2:03
Speaker 4: seventy three by Congress, gives the city a local government,
2:08
Speaker 4: the mayor, a thirteen member council, and a number of
2:11
Speaker 4: other local offices. And it does that for the first
2:13
Speaker 4: time in about one hundred years. And so the eighteen
2:16
Speaker 4: seventy four Congress ended local governance in the District of
2:19
Speaker 4: Columbia and initiated one century period where the President basically
2:25
Speaker 4: ran the city through three appointed commissioners. That became an
2:30
Speaker 4: embarrassment after World War Two, and so Congress moved to
2:34
Speaker 4: slowly but surely returned certain elements of democracy to the district.
2:39
Speaker 4: The kind of the capstone of that process was for
2:41
Speaker 4: the Home Rule Act. What the president cannot do is
2:46
Speaker 4: simply wipe that law away. It was passed by Congress.
2:50
Speaker 4: It has to be repealed or altered by Congress. But
2:53
Speaker 4: again within the purview of the law, the president actually
2:56
Speaker 4: has a significant amount of power over law enforcement the city,
3:00
Speaker 4: and that was done intentionally by Congress. And so aside
3:03
Speaker 4: from his control of the National Guard and his ability
3:06
Speaker 4: to essentially bring the Metropolitan Police Department under his control,
3:10
Speaker 4: he also appoints the US Attorney who is the chief
3:12
Speaker 4: law enforcement officer in the district that we don't have
3:15
Speaker 4: district attorneys here in the nation's capital, and so the
3:18
Speaker 4: US Attorney prosecutes pretty much all adult crimes, all felonies.
3:22
Speaker 3: And how long can he take over the DC Police Department.
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Speaker 4: He can do it for a period of up to
3:29
Speaker 4: thirty days. After that, the assumption is that any emergency
3:33
Speaker 4: that the President would need to take over the police
3:36
Speaker 4: department for would have passed. But he is capable of
3:39
Speaker 4: doing that. He was talked off the ledge of doing
3:42
Speaker 4: that back in twenty twenty during the Black Lives Matter
3:45
Speaker 4: protests outside the White House. Again claims as he's doing now,
3:49
Speaker 4: that there was an emergency in the district and that
3:52
Speaker 4: he should take pretty radical measures in order to address
3:56
Speaker 4: that emergency, and so he very closely considered over the MPD.
4:01
Speaker 4: Then he was dissuaded from doing so by local elected
4:04
Speaker 4: officials as well as some of his advisors, and instead
4:08
Speaker 4: he just deployed the National Guard and several other federal
4:11
Speaker 4: assets in order to clear Lafayette Park, which I think
4:14
Speaker 4: many people at the time in hindsight saw it as
4:18
Speaker 4: a pretty robust violation of the First Amendment right to
4:21
Speaker 4: the people protesting.
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Speaker 3: There are there any restrictions on the president's use of
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Speaker 3: the National Guard.
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Speaker 4: There's not restrictions in the law. There are, however, larger
4:33
Speaker 4: problems with using the Guard in urban policing context. I mean,
4:37
Speaker 4: the Guard is not trained for urban policing. It's not
4:40
Speaker 4: even particularly well equipped for urban policing. And the other
4:44
Speaker 4: problem that he has, which he's really not addressing in
4:47
Speaker 4: any way, shape or form, is that the National Guard
4:49
Speaker 4: regularly collaborates with the Metropolitan Police Department pretty much on
4:54
Speaker 4: every inauguration. Back in the late nineteen eighties and early
4:58
Speaker 4: nineteen nineties, the National Guard actually helped the police with
5:01
Speaker 4: crime suppression, because at that point, the DC did have
5:05
Speaker 4: a pretty robust crime crisis. But the National Guard, understanding
5:09
Speaker 4: its limitations and MPD understanding the problem of putting uniformed
5:14
Speaker 4: soldiers on the street, made sure that the National Guard
5:18
Speaker 4: during that period pretty much only did support the work,
5:22
Speaker 4: and MPD stuck with all the law enforcement work and
5:25
Speaker 4: interacting with the public. And that's because all of those
5:28
Speaker 4: examples that I just gave, the National Guard was cooperating
5:33
Speaker 4: with local authorities. The federal authorities were coordinating with the
5:37
Speaker 4: mayor and with the council. What's unique about the deployment
5:40
Speaker 4: in twenty twenty, and also the one that he announced today,
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Speaker 4: is that the White House is not just not coordinating
5:48
Speaker 4: with local authorities, but is actively seeking to undermine through
5:52
Speaker 4: its deployment of federal assets to the city.
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Speaker 3: Is this similar to Trump sending troops and the National
5:59
Speaker 3: Guard into Los Angeles and the legality of that is
6:04
Speaker 3: going to be decided at a trial this week.
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Speaker 4: Yes, I mean this is very similar, not just the
6:09
Speaker 4: Los Angeles, but I would also argue New York. And
6:12
Speaker 4: so the President has pretty consistently not just during his
6:17
Speaker 4: first term and now and to his second but for
6:20
Speaker 4: much of his adult life attacks large democratic cities as
6:24
Speaker 4: crime ridden, as stilthy, and as a place that were
6:27
Speaker 4: he in charge of them, he would clean up with
6:30
Speaker 4: an iron fist, And that rhetoric has become more focused
6:33
Speaker 4: and more specific once he got into elected office, and
6:36
Speaker 4: so he's gone after those places once he got official power.
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Speaker 4: You can see this in Los Angeles with the Ice raid,
6:43
Speaker 4: where he's essentially going around the local government, creating a
6:46
Speaker 4: crisis and then sending in the National Guard to try
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Speaker 4: and address that crisis. You can see this in New York,
6:51
Speaker 4: where he is really using the Justice Department in a
6:55
Speaker 4: criminal manner to get the mayor, Eric Adams in his
6:59
Speaker 4: pocket so that he can have relatively free reign in
7:02
Speaker 4: the city. And the one place where he's already allowed
7:06
Speaker 4: to do this stuff without having to go around or
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Speaker 4: budget the law is Washington, DC, because he already has
7:13
Speaker 4: a significant amount of power in the city, and so
7:15
Speaker 4: he appears to be planning to use at least a
7:17
Speaker 4: portion of that power.
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Speaker 3: So any ruling in the LA trial won't apply to DC.
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Speaker 4: Then, correct, The President has way more power in the
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Speaker 4: federal District than he does pretty much anywhere else in
7:31
Speaker 4: the United States, and that's specifically enshrined in the Home
7:34
Speaker 4: Rule Act. But again, there is what's legal and there's
7:38
Speaker 4: what's right, and I think the President is towing the
7:41
Speaker 4: line at least when it comes to what's legal. He
7:43
Speaker 4: is not doing that when it comes to what's right.
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Speaker 3: This move apparently stems from a carjacking of a former
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Speaker 3: Doege employee, and the President declared a public safety emergency.
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Speaker 3: Is he the final word on whether they is an emergency?
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Speaker 4: Well, I mean, it wasn't even a carjacking. It was
8:04
Speaker 4: an alleged attempted carjacking that was actually stopped by an
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Speaker 4: MPD officer. I mean, the whole reason we have a
8:11
Speaker 4: clear record of this is because an MPD officer saw
8:15
Speaker 4: the alleged crime taking place, intervened and probably saved mister
8:20
Speaker 4: Korustine from much horse beating and perhaps the loss of
8:23
Speaker 4: his property, which speaks to me to a relatively good
8:28
Speaker 4: policing regime here in the city. But the answer to
8:31
Speaker 4: your question is, unfortunately no. The Home Rule Act, like
8:35
Speaker 4: most laws in this country, was written with the assumption
8:39
Speaker 4: that the person carrying them out in this case, the President,
8:43
Speaker 4: would be a gentleman and a statesman and wouldn't just
8:46
Speaker 4: lie to get their way. And so the Home Rule
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Speaker 4: Act is written to say that if the President determines
8:51
Speaker 4: that there is an emergency, he is able to take
8:53
Speaker 4: emergency control of a metropolitan police department. That leaves the
8:57
Speaker 4: determination with the president unfortunate, and so that's where we are.
9:03
Speaker 3: Trump has also threatened that if Zoran Mandami wins the
9:08
Speaker 3: mayoral race in New York City, he's going to take
9:11
Speaker 3: over that city.
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Speaker 4: The president does, not, to my mind, have legal authority
9:17
Speaker 4: to take over an American city. DC is a unique
9:20
Speaker 4: case because it is the federal district. But that sounds
9:23
Speaker 4: like bluster and misdirections.
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Speaker 3: Me looking at history. Have any other presidents tried to
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Speaker 3: do something similar in DC?
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Speaker 4: Yes, and no. There was a push primarily by Congress,
9:35
Speaker 4: not by the president, in the eighteen seventies district the
9:38
Speaker 4: district of democracy entirely, and that was successful, and so
9:42
Speaker 4: in eighteen seventy four Congress repealed all democracy in the
9:45
Speaker 4: district and then gave the power to the president to
9:48
Speaker 4: administer it directly. There was also a pretty big push
9:52
Speaker 4: by the Nixon administration to campaign against the district in
9:56
Speaker 4: nineteen sixty eight as the quote unquote crime capital of
10:00
Speaker 4: the United States, and when he got into office, he
10:03
Speaker 4: put together a very robust anti crime package that DC
10:07
Speaker 4: residents roundly rejected. The difference between then and now, though,
10:13
Speaker 4: is that the district didn't have a home rule government
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Speaker 4: in nineteen sixty nine when Nixon begins to implement these policies.
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Speaker 4: And the other is that there were liberals in Congress
10:24
Speaker 4: with power who were willing to push back against the
10:27
Speaker 4: president's initiatives. We don't have those circumstances now. If the
10:31
Speaker 4: president takes these powers, it is a violation at least
10:34
Speaker 4: of the spirit, if not the letter, of the law
10:37
Speaker 4: of home rule. And when it comes to Congress, you
10:41
Speaker 4: really don't have people in power in the Republican majority
10:45
Speaker 4: who have any intention of checking the president's whims when
10:48
Speaker 4: it comes to these situations.
10:50
Speaker 3: But it does appear that what Trump is doing here
10:53
Speaker 3: is all legal.
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Speaker 4: Well, the only thing I'd underscore is that I think
10:57
Speaker 4: that we've become quite numb to the president many in
11:02
Speaker 4: various efforts to violate the rights of those Americans with
11:05
Speaker 4: whom he does not agree. So when he began speaking
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Speaker 4: of federalizing the district, the question that many people asked
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Speaker 4: was not should he do it? But can he do it?
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Speaker 4: And I think it's important to not only ask can
11:19
Speaker 4: he do it, which unfortunately he can, but should he
11:23
Speaker 4: do it? So to remind folks that this is not
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Speaker 4: a violation of the law, but it is a violation
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Speaker 4: of our principles, of our principles of no taxation without representation,
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Speaker 4: of our principles of every citizen has a specific set
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Speaker 4: of rights that other citizens shouldn't look to violate, and
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Speaker 4: the President is violating those principles in a very robust
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Speaker 4: and unfortunate manner.
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Speaker 3: Thanks for joining me on the show. Thanks so much
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Speaker 3: for joining me on the show. That's George Derrick Musgrove,
11:52
Speaker 3: a professor of history at the University of Maryland, Baltimore County.
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Speaker 3: Coming up next on the Bloomberg Law Show, Trump is
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Speaker 3: threatening to impose tariffs of up to two hundred and
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Speaker 3: fifty percent on pharmaceutical imports. What are the potential consequences.
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Speaker 3: I'm June Grosso and you're listening to Bloomberg. President Trump
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Speaker 3: is threatening to impose tariffs of up to two hundred
12:15
Speaker 3: and fifty percent on pharmaceutical imports. He said there would
12:20
Speaker 3: be an initially small tariff, and then in a year
12:23
Speaker 3: or at most a year and a half, the tariffs
12:25
Speaker 3: will go up to one hundred and fifty percent and
12:28
Speaker 3: then up from there. It's not the first time that
12:31
Speaker 3: Trump has threatened to impose steep tariffs on pharma. Here
12:35
Speaker 3: he is at the National Republican Congressional Committee President's dinner
12:40
Speaker 3: in April.
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Speaker 2: We're going to tariff for our pharmaceuticals. And once we
12:44
Speaker 2: do that, they're going to come rushing back into our
12:46
Speaker 2: country because with a big market.
12:49
Speaker 3: Trump wants more farmer companies to manufacture their drugs in
12:52
Speaker 3: the United States. Joining me is healthcare attorney Harry Nelson
12:56
Speaker 3: of Leech Tishman Nelson Hardiman. Harry start by telling us
13:00
Speaker 3: about these threatened tariffs on drugs.
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Speaker 1: President Trump is threatening these tariffs up to two hundred
13:08
Speaker 1: and fifty percent on pharmaceutical tariffs. He's using this Section
13:12
Speaker 1: two point thirty two right to claim a national security
13:16
Speaker 1: interest under the theories that the shrinkage in US production
13:23
Speaker 1: of drugs is a national security risk and that these
13:27
Speaker 1: tariffs will sort of force drug companies to build infrastructure
13:31
Speaker 1: in the United States to ensure access to the drug
13:33
Speaker 1: supply and prevent disruption. So that's the theory behind this plan.
13:37
Speaker 1: But in the short term, he's planning to, you know,
13:41
Speaker 1: essentially significantly increase the price of all imported drugs to
13:45
Speaker 1: create the incentive to make that happen.
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Speaker 3: Why do you think he's targeting pharmaceuticals in particular.
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Speaker 1: I think the pharmaceutical industry is first of all, it's
13:54
Speaker 1: just a massive part of our overall economy. But I
13:57
Speaker 1: also think this is a way to get attention. And
14:00
Speaker 1: I think we've had a history, even from President Trump's
14:03
Speaker 1: first administration, where drug prices were seen as a threat,
14:08
Speaker 1: something that upsets consumers. And I think ultimately, even though
14:11
Speaker 1: people ultimately need American consumers need medications, they're kind of
14:15
Speaker 1: an easy target to pick on from a popularity standpoint.
14:19
Speaker 3: Trump wants more FORMA companies to manufacture their drugs in
14:24
Speaker 3: the US, but already three companies, Johnson and Johnson, Astrazenica,
14:31
Speaker 3: and Eli Lilly said they would spend fifty five billion,
14:35
Speaker 3: fifty billion, and twenty seven billion, respectively on expanding drug
14:40
Speaker 3: manufacturing here.
14:42
Speaker 1: Yeah, say pharmaceuticals that you're mentioning, you know, which are
14:45
Speaker 1: already essentially global companies. They're all responding that they want
14:49
Speaker 1: to increase the production capacity in the United States at
14:52
Speaker 1: the same time that they're threatening that this is going
14:54
Speaker 1: to really hurt patients, urt healthcare providers access to medication,
14:59
Speaker 1: and really hurt R and D research and development. But
15:02
Speaker 1: they are responding and trying to, you know, to give
15:05
Speaker 1: a signal that they're prepared to ramp up their US
15:08
Speaker 1: based production.
15:10
Speaker 3: I mean, will this increase the cost of pharmaceuticals to
15:14
Speaker 3: consumers if he puts these tariffs on absolutely.
15:17
Speaker 1: First of all, we should say, even before he does
15:20
Speaker 1: anything specific, we're already looking at, you know, a different
15:24
Speaker 1: teriffs of aning on what part of the world you're
15:25
Speaker 1: talking about. But we already have EU tariffs at fifteen percent,
15:29
Speaker 1: India twenty five percent. I think China's at ten percent,
15:33
Speaker 1: So there already is you know, a lower level tariffs
15:36
Speaker 1: that are but obviously we're talking about potentially increasing these
15:39
Speaker 1: as much as twenty five times. So either American consumers
15:43
Speaker 1: are already paying the price increases or the drug manufacturers
15:47
Speaker 1: are containing you know these and just taking a hit
15:50
Speaker 1: on their bottom line. But this is obviously a dramatic
15:53
Speaker 1: going from ten to fifteen percent to two hundred and
15:56
Speaker 1: fifty percent. It's pretty radical.
15:58
Speaker 3: He said, other nations make a fortune on pharmaceuticals, citing
16:02
Speaker 3: drugs imported from China and Ireland. Is that true? And
16:06
Speaker 3: don't pharmaceutical companies in the US make a fortune as well?
16:11
Speaker 1: Yeah? Obviously, like there are a lot of US companies
16:13
Speaker 1: making a lot of money on drug It's interesting that
16:15
Speaker 1: reference to Ireland is super interesting. Ireland is, among other things,
16:20
Speaker 1: notably producing some of the GLP one weight loss drugs
16:24
Speaker 1: that are just surging in demand. You know, some of
16:27
Speaker 1: glue tides, there's eppetide, and so you know, when we
16:30
Speaker 1: talk about China and India, we're talking much more about
16:33
Speaker 1: the generics. And so the reality is like our drug
16:37
Speaker 1: supply is fairly multinational between Europe and Asia. Yes, these
16:42
Speaker 1: countries are producing a lot of the drugs and inherently
16:45
Speaker 1: making profits that come from those drugs. But it's not
16:48
Speaker 1: like we don't have any US manufacturing. It's just a
16:52
Speaker 1: question of how much of what the alocation is today
16:54
Speaker 1: and what he wants it to be.
16:56
Speaker 3: Has he said what he wants it to be, It
16:58
Speaker 3: sounds like he.
16:58
Speaker 1: Wants it to be something like one hundred percent of
17:01
Speaker 1: the US or ninety ten. But it's interesting question. I
17:04
Speaker 1: haven't seen exact data, but I think it's spared to
17:07
Speaker 1: say that the majority of drugs that Americans are consuming
17:12
Speaker 1: are imported. Depending on how you measure, you know, whether
17:15
Speaker 1: you're measuring revenue or actual production, the percentage is going
17:18
Speaker 1: to be different. But it definitely is the case that
17:20
Speaker 1: we have more foreign sources. He's certainly trying to reverse
17:23
Speaker 1: that and make make sure that the overwhelming majority of
17:26
Speaker 1: drugs are coming from US production.
17:28
Speaker 3: On July thirty first, he sent letters to seventeen drug
17:32
Speaker 3: companies urging them to lower drug prices. US drug prices
17:36
Speaker 3: by September twenty ninth to most favored nation amounts paid
17:40
Speaker 3: by other nations. What does that mean?
17:42
Speaker 1: Most favored nation is just a reference to essentially, whatever
17:46
Speaker 1: the best pricing that a particular company is offering in
17:51
Speaker 1: the marketplace it has to offer to the United States.
17:55
Speaker 1: So this has been a particular Again, this is a
17:58
Speaker 1: theme that went back to the first Trump administration, which
18:01
Speaker 1: is that America essentially props up the pharmaceuticals by paying
18:06
Speaker 1: higher prices for drugs. We know that Medicare, for example,
18:10
Speaker 1: has limitations that prohibit the Medicare program, the US government
18:14
Speaker 1: from negotiating with drug manufacturers over certain prices. We saw
18:18
Speaker 1: legislation and the Biden administration to begin to allow negotiations
18:23
Speaker 1: on some drugs. But the point here is that most
18:26
Speaker 1: favorite nation and status would mean that the US would
18:28
Speaker 1: not be subsidizing drug costs drug development costs for the
18:32
Speaker 1: rest of the world and allowing them to take much
18:34
Speaker 1: cheaper costs while Americans and insurance companies absorbed all those
18:38
Speaker 1: additional expenses.
18:39
Speaker 3: Will you explain a little more detail how the US
18:43
Speaker 3: is subsidizing the development costs for other countries.
18:47
Speaker 1: Right what's happening, essentially is that because we have certain
18:50
Speaker 1: government programs, most notably in Medicare, that are locked into
18:54
Speaker 1: paying certain very high costs for drug companies and not
18:57
Speaker 1: being able to negotiate. And if you think about their
19:00
Speaker 1: purchasing power, you know, the Medicare program is without question
19:04
Speaker 1: the single largest purchaser of drugs. So I think since
19:07
Speaker 1: the data is that you know, in many cases, particularly
19:10
Speaker 1: on brand name prescription drugs, the US and the Medicare
19:13
Speaker 1: program is paying two and a half to three times
19:17
Speaker 1: higher than other advanced industrialized countries, and so in many cases,
19:22
Speaker 1: basically two hundred and fifty percent over foreign drug prices.
19:26
Speaker 1: It might be that that two hundred and fifty percent
19:28
Speaker 1: tariff that President Trump is referencing was based on that
19:31
Speaker 1: data point alone. And you know, the argument that the
19:34
Speaker 1: drug companies make is that are paying these higher prices
19:38
Speaker 1: here in America helps sustain their innovation, their drug development,
19:42
Speaker 1: helping you know, patients around the world who can't afford it.
19:45
Speaker 1: But the reality is, when you look at other advanced
19:47
Speaker 1: industrialized countries, including you know, the European Union for example,
19:50
Speaker 1: there's no explanation why we should be bearing that higher burden. Essentially,
19:54
Speaker 1: you know, the argument is that when we pay for
19:57
Speaker 1: drugs with public funded research in the US as well,
20:00
Speaker 1: that we're essentially paying the burden once you know, in
20:02
Speaker 1: terms of our tax level, and then another time at
20:05
Speaker 1: the pharmacy. It's an effort to rebalance. I think the.
20:08
Speaker 3: Real solution would be to change the medicare laws.
20:13
Speaker 1: That would be one huge piece of the puzzle, allowing
20:15
Speaker 1: the government to negotiate for fair pricing. I think another
20:19
Speaker 1: just another data point here is that supposedly, I think
20:22
Speaker 1: the number is seventy five percent of global drug company
20:26
Speaker 1: profits come from their US sales, so you can imagine
20:30
Speaker 1: there's a lot of room to negotiate pricing downward where
20:33
Speaker 1: the drug companies can still do just find and make
20:36
Speaker 1: a reasonable return on their investments from the Medicare program
20:40
Speaker 1: without us having to carry, you know, their entire profitability
20:44
Speaker 1: and worry about their shareholders. So it seems like a
20:47
Speaker 1: rational move to allow the Medicare program and other large
20:52
Speaker 1: governmental programs to negotiate like anybody else in the marketplace
20:57
Speaker 1: over what the fair price is. But you know, the
20:59
Speaker 1: drug companies have lobbied to prevent that from happening for
21:01
Speaker 1: a long time now.
21:02
Speaker 3: So I was going to ask you why they can't negotiate,
21:06
Speaker 3: and I guess it was the lobbying by the drug
21:08
Speaker 3: companies that stops that.
21:10
Speaker 1: Yeah, the drug companies are certainly one of the most
21:13
Speaker 1: powerful groups. They've had bipartisan support, and you know, they've
21:17
Speaker 1: used the amazing advances that we've made in pharmaceutical research
21:21
Speaker 1: and innovation and particularly getting cutting edge drugs, life saving,
21:26
Speaker 1: really game changing drugs on many medications into the market
21:30
Speaker 1: to fund massive amounts of hundreds of millions of dollars
21:33
Speaker 1: of lobbying Congress to support them, and we have not
21:38
Speaker 1: yet seen a real turn, you know, on the part
21:41
Speaker 1: of Congress, And one of the really interesting questions will
21:44
Speaker 1: be how far you know President Trump may be able
21:48
Speaker 1: to change that.
21:50
Speaker 3: Drug companies have said that tariffs might disrupt international supply chains.
21:56
Speaker 3: Is there a possibility that if tariffs are imposed, people
21:59
Speaker 3: will not be able to get the drugs that they need.
22:03
Speaker 1: Well, I mean, I think the question is going to
22:05
Speaker 1: be who's going to bear the burden of these if
22:08
Speaker 1: prices increase when we say two hundred and fifty percent,
22:10
Speaker 1: we're basically seeing increasing prices twenty five times. So obviously,
22:15
Speaker 1: if you're a hospital, for example, and you need to
22:18
Speaker 1: buy injectable drugs to have the inventory for when patients
22:23
Speaker 1: need particular drugs or cancer drugs, you know, the question
22:27
Speaker 1: is who's going to pick up that cost? If an
22:29
Speaker 1: injectable drug went from costing twenty dollars today to all
22:33
Speaker 1: of a sudden five hundred dollars proper single file or whatever,
22:37
Speaker 1: you know, just patient, that's a dramatic problem. And you
22:40
Speaker 1: can imagine that budgets from hospital reimbursement from insurance companies
22:45
Speaker 1: are going to limit uptake and it's going to take
22:48
Speaker 1: time to build new facilities in the US not subjects
22:51
Speaker 1: to the shriffs. That might take years, and so in
22:54
Speaker 1: the meantime, you can imagine that there's going to be
22:57
Speaker 1: a point where certain drugs just won't be available certain
23:00
Speaker 1: hospitals and in certain parts of the US.
23:02
Speaker 3: I mean, we should point out that the White House
23:04
Speaker 3: previously pledged to impose steep tariffs on pharmaceuticals and later
23:10
Speaker 3: backed off, so this could just be floating this look.
23:15
Speaker 1: I think certainly President Trump got everyone's attention in terms,
23:20
Speaker 1: you know, and that's been the pattern. We hear extreme
23:22
Speaker 1: numbers as part of a negotiating position, and then ultimately
23:26
Speaker 1: negotiated settlements for lower numbers when there's outcry from the
23:30
Speaker 1: industry from voters. And I do expect that we will
23:34
Speaker 1: see some smaller tariff, probably more in the zone of
23:37
Speaker 1: ten to twenty twenty five percent, applied to select products,
23:41
Speaker 1: and I think probably some exemptions for drug with critical
23:45
Speaker 1: shortages in terms of supplies. I don't think the administration
23:48
Speaker 1: is looking to trigger shortages and lawsuits and to antagonize seniors,
23:53
Speaker 1: particularly because so many medications for chronic conditions are really
23:57
Speaker 1: an issue for seniors, which is why Medicare is such
23:59
Speaker 1: a big so I do think we're going to end
24:02
Speaker 1: up with something much narrower. But this is a very
24:05
Speaker 1: effective way to put pressure and get attention on this issue,
24:09
Speaker 1: even if it's creating a little bit of anxiety for
24:11
Speaker 1: many of us along the way.
24:12
Speaker 3: Harry, just how concerning do you find these threats of
24:16
Speaker 3: potential tariffs on drugs?
24:18
Speaker 1: Whether you're a patient or on the provider's side. It
24:21
Speaker 1: should be paying close attention to this issue. But there's
24:22
Speaker 1: still I think a lot of game left to be
24:24
Speaker 1: played on it. I mean, I think the question is
24:26
Speaker 1: going to be who's going to bear the burden of
24:29
Speaker 1: these if prices increase. When we say two hundred and
24:31
Speaker 1: fifty percent, we're basically saying increasing prices twenty five times.
24:35
Speaker 1: So obviously, if you're a hospital, for example, and you
24:39
Speaker 1: need to buy injectable drugs to have the inventory for
24:43
Speaker 1: when patients need particular drugs or cancer drugs, you know,
24:48
Speaker 1: the question is who's going to pick up that cost?
24:50
Speaker 1: If an injectable drug went from costing twenty dollars today
24:54
Speaker 1: to all of a sudden five hundred dollars, that's a
24:57
Speaker 1: dramatic problem. And you can imagine that budge it from
25:00
Speaker 1: hospital reimbursement from insurance companies are going to limit uptake,
25:05
Speaker 1: and it's going to take time to build new facilities
25:08
Speaker 1: in the US not subjects to the sheriffs. That might
25:10
Speaker 1: take years, and so in the meantime, you can imagine
25:14
Speaker 1: that there's gonna be a point where certain drugs just
25:16
Speaker 1: won't be available at certain hospitals and in certain parts
25:19
Speaker 1: of the US.
25:20
Speaker 3: You're going to stay with me, Harry. Coming up next
25:23
Speaker 3: on the Bloomberg Law Show, I'll continue this conversation with
25:26
Speaker 3: healthcare attorney Harry Nelson. Will turn to Health and Human
25:30
Speaker 3: Services Secretary Robert F. Kennedy Junior and the latest in
25:34
Speaker 3: his anti vaccine campaign. I'm June Grosso and you're listening
25:38
Speaker 3: to Bloomberg. Let's turn now to Robert F. Kennedy Junior,
25:43
Speaker 3: the Secretary of Health and Human Services.
25:47
Speaker 5: For years, wherepublicans and Democrats have been talking about how
25:51
Speaker 5: to reorganize the healthcare system, whether it should be private
25:54
Speaker 5: insurance but a single payer, or a public private hybrid.
26:00
Speaker 5: All of those ideas are like moving deck chairs around
26:02
Speaker 5: on the Titanic. The ship is going down.
26:06
Speaker 3: That was Kennedy talking to a bipartisan group of governors
26:10
Speaker 3: in Colorado springs at the end of last month. Last week,
26:14
Speaker 3: Kennedy said that HHS was going to pull nearly five
26:18
Speaker 3: hundred million dollars worth of contracts with universities, drug companies,
26:23
Speaker 3: and other labs working on new mRNA vaccines. Kennedy said
26:28
Speaker 3: the funds would be shifted toward quote safer, broader vaccine platforms.
26:34
Speaker 3: I've been talking to healthcare attorney Harry Nelson of Leech
26:38
Speaker 3: Tishman Nelson Hardiman. What's the impact of this.
26:43
Speaker 1: Yeah, that activity on vaccines is on the targeting by
26:46
Speaker 1: this administration is potentially very disruptive. A lot of it
26:52
Speaker 1: will depend on what we see in terms of any
26:55
Speaker 1: future you know, spread of viruses. You know, I think
26:59
Speaker 1: this is the is really potentially limiting supply on some
27:03
Speaker 1: of the seasonal drugs. You know. The real question is
27:06
Speaker 1: like what's going to happen with the latest variance. You know,
27:10
Speaker 1: COVID is still continuing to what's called mutate every season
27:13
Speaker 1: along with all the influenza vaccines, and so I do
27:18
Speaker 1: think this is a kind of a high risk move
27:20
Speaker 1: and there could be significant backlash if there is some
27:24
Speaker 1: kind of an outbreak or a particularly harsh season, But
27:29
Speaker 1: you know, until that happens, it doesn't seem like there's
27:31
Speaker 1: public outcry quite yet, and I think it will sort
27:34
Speaker 1: of depend on how things actually develop on a public
27:37
Speaker 1: health lovel He.
27:38
Speaker 3: Said the vaccines quote failed to protect effectively against upper
27:43
Speaker 3: respiratory infections like COVID and flu. What is he basing
27:48
Speaker 3: that on? Is that true?
27:50
Speaker 1: I mean, I think there is still some divide among
27:54
Speaker 1: researchers about how effective the mRNA vaccines are. I'm not
27:59
Speaker 1: quite sure. I think it's clear that he's putting his
28:02
Speaker 1: thumb on the scale, you know, on an issue where
28:04
Speaker 1: there is some divide among public health experts and then
28:08
Speaker 1: the infectious to these community and the time is going
28:10
Speaker 1: to bear out whether we have the level of preparedness
28:13
Speaker 1: that we need, you know, for the next major problem
28:16
Speaker 1: on this front. But it's a little bit scary to
28:19
Speaker 1: see just sort of the political choices that seem to be,
28:24
Speaker 1: you know, driving us rather than any scientific evidence based
28:27
Speaker 1: decision making.
28:28
Speaker 3: Correct me if I'm wrong with the mrn A vaccine
28:32
Speaker 3: was the reason why they were able to fight COVID
28:37
Speaker 3: so fast, right, the operation warp speed.
28:41
Speaker 1: Yeah, absolutely, the mRNA vaccines that we were able to
28:44
Speaker 1: develop really allowed for a massive acceleration so that we
28:50
Speaker 1: had vaccines in the marketplace by early twenty twenty one already,
28:55
Speaker 1: you know, basically less than a year after the global
28:59
Speaker 1: spread of COVID nineteen. And I think that it's clearly
29:03
Speaker 1: is the fastest adaptable platform for new viral threats. So
29:08
Speaker 1: scrapping that investment is not putting us in a good
29:12
Speaker 1: position for preparedness. It's certainly not giving us, the United States,
29:16
Speaker 1: a lead on being able to respond to the next
29:20
Speaker 1: threat that we face. And I think we're gonna see
29:25
Speaker 1: how it plays out. You know, hopefully we won't see
29:28
Speaker 1: some kind of tragic disaster that where we're caught flat
29:32
Speaker 1: footed by this rollback.
29:33
Speaker 3: But I time will tell you know, he's a vaccine
29:37
Speaker 3: denier or a vaccine skeptic. What else has he done
29:41
Speaker 3: to inhibit vaccinations.
29:44
Speaker 1: There's also been a lot of policy shifting on, for example,
29:49
Speaker 1: moving away from vaccine recommendations for children, for pregnant women.
29:55
Speaker 1: There has been a kind of a halt to other
29:59
Speaker 1: kinds of god government preparation. So it's there's been quite
30:03
Speaker 1: a bit of other activity by RFK and by his team,
30:08
Speaker 1: obviously internally massive restructuring, so a lot of the personnel
30:12
Speaker 1: who were responsible for public health emergency response on this
30:17
Speaker 1: front are no longer in their jobs. We've seen it
30:20
Speaker 1: appears that some of the messaging and the public marketing
30:23
Speaker 1: campaigns for people to get vaccinated are being cut. He
30:27
Speaker 1: eliminated public comment on policy, and so it's a lot
30:31
Speaker 1: of like internal administrative things happening within the Department of
30:36
Speaker 1: Health and Human Services that are really you know, sort
30:40
Speaker 1: of silencing in many ways the vaccine advocacy coming from
30:45
Speaker 1: within the federal government.
30:46
Speaker 3: And has he also ended other kinds of grants for
30:50
Speaker 3: research projects.
30:52
Speaker 1: Yeah, absolutely, that's been well, not only Kennedy, but some
30:55
Speaker 1: of it is happening, you know, within for example, National
30:58
Speaker 1: Institutes of Health. But we've seen just massive cuts affecting
31:03
Speaker 1: most large research universities. The Health and Human Services grant
31:08
Speaker 1: cuts are I haven't seen the latest target, but I
31:11
Speaker 1: have heard from multiple researchers at large academic medical centers
31:16
Speaker 1: this is it's hitting every center. Grants canceled, you know,
31:22
Speaker 1: labs shuttered, and just a whole range of cuts that
31:28
Speaker 1: are likely to have some significant impact on public health
31:31
Speaker 1: research and on all kinds of drug related projects and.
31:36
Speaker 3: I understand that there was a commission, a bipartisan commission
31:39
Speaker 3: that Warren Congress in April that China has already pulled
31:43
Speaker 3: ahead of the US and some key life sciences area.
31:47
Speaker 3: I mean, is talent starting to leave the US because
31:51
Speaker 3: the funding isn't here anymore.
31:53
Speaker 1: There's been a lot of talk about whether, you know,
31:56
Speaker 1: we are taking a backseat to China. I haven't seen
31:59
Speaker 1: data about most US researchers heading to China, so but
32:04
Speaker 1: there is there's no question that we are essentially seeding
32:10
Speaker 1: a lot of leadership here to to China. And you know,
32:15
Speaker 1: just whether it's it's researchers actually migrating, which I'm skeptical
32:20
Speaker 1: how much you know researchers will be excited to move
32:24
Speaker 1: to China, or just you know, the relative significant funding
32:28
Speaker 1: that's continuing in China with broadcuts here having more of
32:32
Speaker 1: an impact.
32:34
Speaker 3: Kennedy also going to target the Federal Vaccine Court, which
32:37
Speaker 3: I think most people have never heard of.
32:40
Speaker 1: Yeah, I mean that that's on his list. I don't
32:42
Speaker 1: think there's a single part of the vaccine infrastructures that
32:46
Speaker 1: he's not directly targeting in one way or another as
32:49
Speaker 1: part of his Make America Healthy Again campaign.
32:52
Speaker 3: So he did promise not to during his confirmation hearings.
32:55
Speaker 3: Thanks so much, Harry. That's healthcare attorney Harry Nelson of
32:59
Speaker 3: Leach Toishman Nelson Hardiman. And that's it for this edition
33:03
Speaker 3: of The Bloomberg Law Show. Remember you can always get
33:05
Speaker 3: the latest legal news on our Bloomberg Law podcasts. You
33:09
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33:13
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33:17
Speaker 3: to tune into The Bloomberg Law Show every weeknight at
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Speaker 3: ten pm Wall Street Time. I'm June Grosso and you're
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Speaker 3: listening to Bloomberg